Avraham Burg (58) was a member of the Labor Party and for some time the Chairman of the Knesset. His late father was a long-time cabinet minister and a leader of the National-Religious Party, before it became a rabid messianic mob. The relations between Burg sr. and me were quite friendly, largely because we were the only two German-born members of the Knesset.

Burg jr., who still wears the kippah of an observant Jew, joined the Labor Party and was a member of the “eight doves”, a moderate grouping in the party.

Last week Haaretz published an article in which Burg proposed linking the “two-state solution” with a two-state federation. He used the metaphor of a building, the first floor of which would consist of human rights, the second floor would host the two states, Israel and Palestine, and the third the federation.

This brought a lot of memories to my mind.

In the spring of 1949, immediately after the signing of the original armistice agreements between the new State of Israel and the Arab countries which had intervened in the war, a group was formed in Israel to advocate the setting up of a Palestinian state next to Israel, and the signing of a covenant between the two nations.

At the time, that idea was considered heretical, since the very existence of a Palestinian people was strenuously denied in Israel.

The group consisted of a Muslim Arab, a Druze Arab and me. After some time, when our attempts to form a new party failed to get off the ground, the group dispersed. (Curiously enough, all three of us later became members of the Knesset.)

We were of one mind concerning a salient point: the borders between the two states must be open for the free movement of people and goods. We did not use the word “federation”, but something like that was on our minds.

After the 1956 Suez war, a new group took up the idea. It was founded by Nathan Yalin-Mor and me and attracted an impressive array of intellectuals, writers and artists. Yalin-Mor was the former leader of the Fighters for the Freedom of Israel, branded by the British as the most extreme Jewish terrorist organization and known to them as the “Stern Gang”.

We called ourselves “Semitic Action” and published a document, “The Hebrew Manifesto”, which I still think was and has remained unique: a complete, detailed blueprint for a different State of Israel. It contained among many other things the plan for the establishment of an Arab-Palestinian state alongside Israel, and a federation between Israel, Palestine and Jordan, to be called “the Jordan Union”.

In the 1970s, Abba Eban floated the idea of a Benelux-type solution, a name derived from the federation-like arrangement between Belgium, the Netherlands and Luxemburg. To my surprise, when I first met with Yasser Arafat during the siege of Beirut in 1982, he used the very same term: “A federation between Israel, Palestine and Jordan, and perhaps Lebanon too – why not?” He repeated the same idea, in the same words, at our last meeting, just before his mysterious death.

In the course of time, I dropped the word “federation”. I had come to the conclusion that it frightened both sides too much. Israelis feared that it meant diminishing the sovereignty of Israel, while Palestinians suspected that it was another Zionist ruse to keep up the occupation by other means. But it seems clear that in a small land like historical Palestine, two states cannot live side by side for any length of time without a close relationship between them.

It must be remembered that the original UN partition plan included a kind of federation, without using the word explicitly. According to the plan, the Arab and the Jewish states were to remain united in an economic union.

The world is full of federations and confederations, and no two are alike. Each one is a unique structure, formed by local circumstances and history. All are based on a covenant – foedus in Latin, hence the term.

The terrible US civil war was fought out between a federation (the North) and a confederation (the South). The federation was conceived as a close union with a strong central government, the confederation as a loose cooperation between semi-independent states.

The list is long. Switzerland calls itself a confederation. Post-Soviet Russia is a federation. Germany is a “federal republic”, and so on.

A federation between Israel and Palestine, with or without Jordan, will have to find its own character, according to its unique circumstances.

But the main point is timing.

Since Burg likened his proposal to a building, it follows that it must be built floor after floor, from the bottom up. That’s how I see it too.

The first floor is the two-state solution. This must be implemented first of all. Any idea about what may come after is meaningless without it.

This means the foundation of the State of Palestine along the 1967 borders, with East Jerusalem as its capital, as a free, independent and sovereign nation-state of the Palestinian people.

As long as this basic idea is not implemented, and the solution of all the connected problems (“core issues”) agreed upon, nothing else has much meaning.

The occupation is a bleeding wound, and it has to be healed in the framework of peace before everything else. There can be no meaningful talk about federation between oppressor and oppressed. Federation presumes partners of equal status, if not of equal strength.

The two-state solution promises peace – at least the formal peace that puts an end to the hundred-year old conflict. Once this peace is achieved, one can – and should - think about the next stage, the deepening of the peace and turning it into a day-to-day reality that shapes people’s lives.

Lets assume that this round of negotiations, or some future round, will lead to a formal peace treaty, and an end to all mutual claims, as John Kerry puts it. It’s then that the idea of federation should be considered.

What do we have in mind? A close federation or a loose confederation? What functions are the two sides ready - of their own free will - to transfer from the national to the federal level?

Most probably, Israel will not give up its freedom of decision-making concerning its relations with the world-wide Jewish Diaspora and immigration. The same is true for Palestine’s relation to the Arab world and the return of refugees.

What about foreign relations in general? I believe that in all existing federations and confederations, the central authority is in charge of these. In our situation this constitutes a problem. Military and security matters are even more problematic.

As I see it, a federation will be mostly concerned with economic matters, matters of human rights, freedom of movement and such.

But the main point is this: the negotiations between the State of Israel and the State of Palestine concerning a federation must be free of pressure, conducted in good faith between equals.

Will this be the end of the road to real peace? I like to think that these are only the first few steps.

If the two-state solution is the first floor, and the federation is the second, one may imagine that the third floor will be a regional union, on the lines of the present European Union.

With the current turmoil in our region, it is hard to imagine that the Arab Spring will lead to any kind of stability. But our memory is short. The EU was the direct offspring of the most terrible of all wars – World War II, with millions of Europeans among the casualties.

A regional organization (I used to call it a “Semitic Union”) that includes Israel and Palestine will be advantageous to all partners in a world where regional groupings are playing an ever expanding role.

But the crown of a new order will be some kind of world governance, which is sorely needed even now. I am fairly sure that it will come into being before this century is over. This is no more utopian than was the idea of a European union a hundred years ago, when a handful of far-sighted idealists first brought it up.

At this point in time, there are a host of problems that can no longer be solved on the national, or even regional, level. The saving of our planet from environmental catastrophe. The regulation of a globalized economy. The prevention of wars and civil wars. The safeguarding of human rights everywhere. The achievement of real equality for women. The protection of minorities. The ending of hunger and diseases. All these need a new world order.

Such an order will necessarily be similar to a worldwide federation. This need not mean the disappearance of nation-states. These will probably continue to exist, as they exist today within the European Union, but with diminished sovereignty.

Can such a world order be democratic? It must be. Some day, humankind will elect a world parliament, as Europeans today elect a European parliament which is steadily taking on new responsibilities.

These are dreams for the future, though it is worthwhile to think about them even now.

But for us, in this small country, the task for today is to achieve peace – the peace between two nations living in harmony in two sister-states.